After three weeks of decreases, mortgage applications turned around this week, increasing 2.5% from one week earlier, according to the latest Weekly Mortgage Applications Survey from the Mortgage Bankers Association’s (MBA) for the week ending November 3, 2023. The bump follows last week’s cooling jobs market report and the pause in interest rate hikes by the Federal Reserve.
This week’s numbers:
- The Market Composite Index, a measure of mortgage loan application volume, increased 2.5% on a seasonally adjusted basis from one week earlier.
- On an unadjusted basis, the Index increased 1% compared with the previous week.
- The Refinance Index increased 2% from the previous week and was 7% lower than the same week one year ago.
- The seasonally adjusted Purchase Index increased 3% from one week earlier.
- The unadjusted Purchase Index increased 1% compared with the previous week and was 20% lower than the same week one year ago.
- The refinance share of mortgage activity increased to 31.4% of total applications from 31.2% the previous week.
- The adjustable-rate mortgage (ARM) share of activity decreased to 9.8% of total applications.
- The FHA share of total applications remained unchanged at 14.7% from the week prior.
- The VA share of total applications increased to 10.5% from 10.1% the week prior.
- The USDA share of total applications remained unchanged at 0.5% from the week prior.
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.61% from 7.86%, with points decreasing to 0.69 from 0.73 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 7.58% from 7.80%, with points decreasing to 0.65 from 0.67 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 7.36% from 7.57%, with points decreasing to 0.91 from 1.03 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.98% from 7.14%, with points decreasing to 0.88 from 1.22 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 6.76% from 6.77%, with points decreasing to 0.80 from 1.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
MBA’s key takeaway:
“The 30-year fixed mortgage rate dropped by 25 basis points to 7.61%, the largest single-week decline since July 2022,” said Joel Kan, MBA’s vice president and deputy chief economist. “Last week’s decrease in rates was driven by the U.S. Treasury’s issuance update, the Fed striking a dovish tone in the November FOMC statement, and data indicating a slower job market. Applications for both purchase and refinance loans were up over the week but remained at low levels. The purchase index is still more than 20% behind last year’s pace, as many homebuyers remain on the sidelines until more for-sale inventory becomes available.”
